New Year Brings New Health Insurance Rules

On this, the first day of 2011, most people are focused on downing Tylenol and trying to remember how they got home. By contrast, few people are focused on health insurance policy.

But if you can get past your hangover, it's worth noting that some pretty significant new healthcare rules kick in today that could have a major impact on the senior citizens in your family -- for the better.

The new rules are designed to help those caught in Medicare's "doughnut hole," offer seniors more preventative care, and limit how much of their customers' money health-insurance companies can keep for overhead and profit....

The new rules include:

*A provision that limits what health insurers can do with the money their customers send in as premiums. The rule requires that insurers spend at least 80 percent of this money on the customers themselves....Previously, there was no federal restrictions on insurance companies' spending. The federal government says some insurers kept 30 or even 50 percent....

*A provision that provides prescription-drug discounts for seniors in Medicare's "doughnut hole." The doughnut hole is a controversial gap in the Medicare prescription-drug benefit passed in 2006. In 2010, for instance, Medicare paid for part of the cost of drugs - until the total cost of the drugs hit $2,830. After that, seniors were responsible for 100 percent of the cost of their drugs, until they had spent $3,610 of their own money. That was the other side of the doughnut hole, and federal insurance kicked in again. This provision will give Medicare recipients stuck in the doughnut hole a 50 percent discount on the price of brand-name prescription drugs....

*A rule giving seniors free screenings for cancer and other diseases.

*The creation of the Center for Medicare and Medicaid Innovation. This new agency is aimed at slowing down the rapid rise of health-care costs. It is supposed to foster innovation in both caring for patients and processing their payments and claims.